Govt Wants Tax to Plug Loopholes

Details

Economy

Monday, 09 January 2012 02:30

By Everton Barnes

Antigua St John's - The government intends to tax allowances and benefits to plug a number of loopholes through which many people have successfully avoided paying their fair share of taxes.

That was the view of the government’s Revenue Reform Project Manager Everette Christian, speaking on a radio talk show on Sunday.

He explained that the Inland Revenue Department is merely enforcing legislation already on the books, and the move does not represent the introduction of new taxes.

He explained that when the law took effect in 2005, it made provision for taxing allowances and benefits. But he said representation was made to then finance minister, Dr Errol Cort, asking for additional time for adjustment to the new law.

According to Christian, Dr Cort decided to delay implementation until January 2006, but when that date came, for reasons unknown, the law was never implemented.

“We have seen cases where there have been declines in the amount of salaries paid to individuals, while at the same time we have witnessed a mushrooming of the amounts these individuals receive in allowances and benefits," he said.

"For example, we have seen examples where housing allowances may mushroom to $20,000 per month, while travelling allowances jump to between $4,000 and $5,000, and similar amounts for entertainment allowances."

The revenue reform project manager said it would have been a serious case of "dereliction of duty" if nothing was done to plug the loopholes.

He acknowledged that implementing the law at this time may represent a case of "Peter paying for Paul," but to minimize this, the department has embarked on a series of consultations to gather feedback from various interest groups before the measures take effect.

He disclosed that discussions have been held with groups including the Employers Federation, the Chamber of Commerce, and the Antigua Hotels and Tourist Association. At least one recommendation so far will be incorporated into the new policy.

Discussions with the Trade Union Congress (TUC) have not been as successful, Christian said. However, the department is committed to holding further discussions to arrive at a position that both sides will find acceptable.

Christian said the new proposals are not set in stone, and both he and the department are open to suggestions from anyone with ideas on how the law may be applied with as little pain as possible.


Meanwhile, head of the Private Sector Organisation (PSO), Patrick Ryan, said meetings have been held with the IRD, but no formal proposals have been submitted.

He acknowledged that some people have been abusing the law, but despite that, he feels that the proposals coming from the government are "too harsh," and the PSO will make a formal statement on the matter later this week.

See related stories:

Union Awaiting Response on Proposed Tax Changes

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